Mexico’s Capital Markets — Opportunities in the Calderon EraA Special Report The six-year tenure of Felipe Calderon, Mexico’s centre right president, is a key window of opportunity for emerging market […]
Category: Regions
Posted inDaily Brief
Mexico Holds Rate At 7%
Mexico’s central bank, Banco de México (Banxico) left its benchmark lending rate unchanged at 7% Friday. This is the third time Banxico has held the rate steady since it made the surprise quarter of a percentage point cut in April. The rate is at the lowest level in nearly a year. This was the first interest rate meeting of the bank since the country’s elections on July 2. Inflation is expected to rise 0.27% this month, with core inflation up 0.26%.
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Citigroup Ups Stake To Take Over Colfondos
Citigroup has bought an additional 20% stake in Colombian pension fund manager Colfondos from local financial entity Cafam to take 100% control of the company. Citigroup made the acquisition via its subsidiary Yonder Investment. This follows the purchase six years ago of a 35% stake from Spain’s BBVA. Colfondos was the country’s fourth-largest pension fund (AFP) as at end-April.
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García Names Cabinet; Assumes Presidency
Peru’s president-elect Alan García takes over the reins today, hoping to banish memories of the last time he was in charge. Supporters of the former president, who left his country an economic disaster at the end of his first presidency (1985-1990), say this time around he will not make the same mistakes. García, who had already named Jorge del Castillo as his premier, Luis Carranza as finance minister, and Jose Antonio Garcia Belaunde as foreign minister, revealed more Cabinet appointments. Juan Valdivia will take the important post of minister of energy and mines, while Hernan Garrido Lecca becomes minister of housing and construction. Independents Rafael Rey is to head up the ministry of production and Allan Wagner is named defense minister. Economics professor Mercedes Araoz takes over the trade portfolio, Pilar Mazzetti is the new interior minister, and Veronica Zavala is appointed minister of transport and communications.
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Yanacocha Sells $100 Million Bonds
Peruvian gold mining company Yanacocha has sold $100 million of bonds in the local market. The bonds were issued in two series, each with a maturity of 10 years. The first series, totaling $58 million, were sold with a fixed coupon rate of 7%; the second, totaling $42 million, were sold with an interest rate of Libor plus 1.4375%. Yanacocha, which produces around half of Peru’s gold output, is owned by Newmont Mining Corp of the US. It is Latin America’s largest gold producer. The bonds were placed by local firm Credibolsa.
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Panama Reopens 2015 Global Bond
The Republic of Panama has reopened its 2015 global bond issue and sold a further $313 million at a yield of 6.813%. The bonds carry a coupon of 7.25% and were priced at 175 basis points over US Treasuries. The issue was three times oversubscribed according to Barclays, which arranged the issue. Panama is to use the money to pay off the one-year $320-million bank loan that financed its buyback of Brady bonds from the market on July 17.
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Colombia Central Bank Keeps Rates Unchanged
Lower-than-expected inflation prompted Colombia’s Central Bank to hold its benchmark interest rate unchanged at 6.5%. Inflation fell in the 12 months through June to 3.94%, the lowest level in 40 years and below the 4%-5% Bank target. Last month the Bank raised the overnight benchmark rate a quarter of a percentage point to its current 10-month high.
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Sodimac Eyes Expansion
Chilean home improvement company Sodimac says it is keen to start operating in several other countries in the region. It has earmarked Argentina, Costa Rica, Mexico and Ecuador as the next markets to be targeted by the company. The company is owned by the Solari family which also owns retailer Falabella. It has a 22% market share in Chile and has operations in Peru and Colombia.
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Ecuador Records $286 Million 1H Current Account Surplus
Ecuador registered a current account surplus of $286 million in the first half of the year. This compares with a deficit of $68 million for the same period in 2005. The 520% year-on-year increase in the surplus has been aided by the high price of crude oil. Earlier this month the government said that it expects to earn an additional $1 billion of revenues this year following the change in the hydrocarbons law affecting royalty payments and as a result of the confiscation of oil fields from US oil company Occidental Petroleum (Oxy).
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Spain’s OHL Buys Mexican Airport Stake
Spanish construction and services company OHL has bought a 49% stake in Mexican airport operator AMAIT with a commitment to invest $101 million over the next 12 months. AMAIT holds the 50-year concession to operate Toluca airport near Mexico City, the base for most of the newly opened low-cost airlines. The airport’s passenger capacity is being expanded to accommodate 4 million travelers a year, up from the current 1.8 million.